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A former director at the City of Montreal says it was widely known that there were problems with ballooning contract costs at the city, but a plan to fix it was nixed in 2006.

Serge Pourreaux, the head of the city’s purchasing department from 2003 to 2006, told the province’s corruption commission this morning that he was tasked with looking at the problems at city hall.

He told the commission during his first day of testimony on Wednesday that it was common knowledge that contract costs were being inflated, sometimes as much as 50 per cent over the costs reported in other Quebec municipalities.

He came up with a plan that he thought could save the city between 40 and 50 million dollars.

There were several recommendations in his report, including centralizing the call for tenders process.

The report also suggested that the city buy its own supplies, rather than including it in the work contracted out to construction The plan was circulated in 2005 and given to the city’s executive committee. It wasn’t a secret report, he said, however, it was not distributed outside of city hall.

Pourreaux said that it wasn’t an easy process to sell his plan to officials. Borough mayors in particular were resistant because they didn’t want to lose control over projects to the larger municipality.

The public works department also didn’t offer a warm welcome to the recommendations, Pourreaux said, because they would have lost control over certain elements of city contracts.

Mayor, Zampino knew about problems

Pourreaux said former mayor Gerald Tremblay and the then-head of the executive committee, Frank Zampino, knew about the problems and the plan to address it.

Things started to derail in 2005 for a number of reasons, Pourreaux said. Several key people who were championing the recommendations left the city.

Pourreaux said his new boss, Robert Cassius de Linval, suggested that he retire.

He likened the events to a coup – the three people who were behind the plan were all pushed out by others resistant to change.

Pourreaux said only two people had the power to bury the plan: Tremblay and Zampino.

Tremblay had been supportive of the plan in the past, he added.

The commission is now taking a scheduled break. The public hearing will resume March 11.

A former city manager was in the witness box this afternoon, detailing the circumstances surrounding another internal report that raised red flags about the city's tendering process.

Claude Léger (Charbonneau Commission)

Claude Léger said he didn’t hand the mayor a 2006 report on how a handful of companies had a monopoly on city contracts because it was the job of the chair of the executive committee to handle that kind of information.

Léger said he wanted to act to stop the problem and, in hindsight, he regrets not ensuring the mayor saw the report. He said he did share a copy with elected officials, including Frank Zampino.

The 2006 report was the subject of earlier testimony by commission analyst, Guy Desrosiers. The report showed that in 2005 more than 50 per cent of the city’s public works contracts were awarded to four companies.

Desrosiers said a portion of that report that named the companies was so sensitive, the city's auditor, Denis Savard, did not include it in the internal document. He instead sent that information separately to the then-newly appointed Léger in an 11-page letter marked "confidential."